Hezbollah has rejected the latest ceasefire proposal for Lebanon, while Israel stated it will not withdraw troops from the country, marking a clear setback for negotiations aimed at ending the US-Iran conflict.
On the macro front, this afternoon will bring the US employment update, a key indicator monitored by the Fed to calibrate borrowing costs. According to consensus estimates, the figures should show the unemployment rate holding steady at 4.3% in May, with job growth slowing to 85,000 new positions following April's higher-than-expected increase.
A reading above consensus is likely to impact markets by reducing the probability of a Fed rate hike.
Around 9:35 CET, the FTSE Mib index was down a fractional 0.10%.
Banks were weak, with UNICREDIT and INTESA posting slight declines. POSTE ITALIANE retreated by 1.15%.
DIASORIN also pulled back by 1.8% following yesterday's surge triggered by market rumors of interest in the diagnostics company, as reported by the Betaville website.
In the energy sector, which saw strong buying interest today, ERG stood out with a 5.85% jump after Kepler Cheuvreux upgraded its recommendation to 'buy' from 'hold' and raised its price target to 27 euros from 24.
Fading AI euphoria on other exchanges, following Broadcom's weaker-than-expected results, is prompting profit-taking on STM, which fell over 3% after recently hitting highs not seen since 2000. PRYSMIAN also traded lower, down 1.4%.
Finally, CAREL INDUSTRIES lost 3.14% after Exane Paribas downgraded the stock to 'neutral' from 'outperform', despite raising its price target to 34 euros.
(Giancarlo Navach, editing Claudia Cristoferi)
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